ontinental Insurance Co.'s legal move to pull its coverage of the Fall River diocese comes less than a week before mediation was scheduled to begin in allegations of sexual abuse against former Catholic priest James R. Porter and is a "huge, total, unbelievable surprise," said the Boston attorney representing about 60 of Porter's alleged victims.

"This is a complete retraction by Continental of what it had agreed to do," said attorney Roderick MacLeish Jr., reacting yesterday to the lawsuit filed by Continental on Tuesday in federal court seeking to cancel its coverage of the diocese.

"Mediation was going to begin Monday and now Continental has pulled out the rug from beneath us, without any explanation."

In a statement released yesterday, the Fall River diocese said Continental's move came "without warning." The New York-based company had told the diocese in June that "it would cover claims made and provide a legal defense for the diocese," the statement said. Now, the diocese said, Continental has "reneged on these promises and . . . is seeking to escape
from its obligation."

But attorneys for Continental late yesterday disputed the position of MacLeish and the church, saying neither should be surprised by Continental's court action seeking to clarify whether it has to defend the diocese in the Porter matter.

During recent negotiations regarding mediation as a way to resolve claims, Continental told the parties it had serious doubts about its obligation to cover the diocese, said attorney Mary Kay Vyskocil of the New York law firm representing Continental in the federal lawsuit against the church. She said the allegations in the case -- namely Porter's sexual abuse of children and the diocese' cover-up -- "screamed out" questions about whether the diocese was insurable regarding Porter.

"We have conducted an investigation and determined when you have this kind of egregious conduct it is uninsurable as a matter of law," said Vyskocil. In its lawsuit, the company argues that the church's failure to block Porter's contact with children was "so egregious and improper as to not be insurable as a matter of law."

"The company did the only responsible thing -- ask the court to decide its liability," said Vyskocil about Continental's lawsuit.

Yesterday, the diocese denied Continental's allegations, saying it "never knowingly allowed Porter to abuse children." It also stated that it would pursue a claim against Continental for "unfair and deceptive insurance practices."

Meanwhile, the alleged victims of Porter yesterday called on the state insurance commissioner to investigate Continental's conduct.

"We are united in our anger at Continental," said John Robitaille, an alleged victim. "The victims and our lawyers have consistently been informed that the Continental Insurance Co. had agreed to participate in the mediation process."

Robitaille said alleged victims have agreed to mediation over civil trials as the best vehicle for pushing church reform. "We felt as though it would be the best way to achieve our goal of reform and of ensuring that pedophilia will never be covered up by a religious institution again," he said yesterday.

Even the mediation consultant chosen by the parties in the dispute reacted angrily yesterday to Continental's pullout. "Continental was on board throughout the negotiations regarding mediation, and it's despicable what they've done," said Paul Finn, the consultant. "It's like the insurance company took them all the way to the altar and then said, 'You're ugly, I don't want you."

MacLeish said that Continental's surprise legal maneuver not only halts efforts to mediate the many sexual abuse local claims against Porter, but also "revictimizes" his clients, who have been preparing their cases for an initial round of mediation before retired Superior Court Judge George Hurd that was to start Monday and run for two weeks.

"We feel sand-bagged," MacLeish said at a news conference yesterday afternoon that was also attended by some of the alleged victims of Porter's sexual abuse while he was a priest in Massachusetts in the 1960s and 1970s.

Although criminal investigations are proceeding against Porter in Massachusetts and in Minnesota, where Porter now lives with his wife and four children, no charges have yet resulted.

Even though the diocese's insurance coverage regarding Porter is now in question, MacLeish said he has asked the church to continue on its own with mediation. "They are thinking about it, but we have not gotten any commitment," he said.

Neither the spokesman for the Fall River diocese, John Kearns, nor the church's attorney in the Porter matter, Frederic Torphy, returned calls yesterday seeking comment. But church officials said that if Continental prevails in its effort to pull out of its policy then the diocese alone faces any financial burden that might result from successful claims.

"Every diocese is autonomous, and no other church has any legal responsibility to Fall River to come up with money," said Rev. Thomas Reese at the Woodstock Theological Center in Washington, D.C. "It's possible other churches might help it it was a reasonable amount of money, but if you're talking millions then the only rational solution might be bankruptcy."